Aryzta shareholders will vote on a new board today

Aryzta shareholders will vote on a new board today

Aryzta has announced board member Annette Flynn will resign after today's (16 September) extraordinary general meeting when shareholders will vote on a new composition of directors, with the chairman seat still under contention after the European bakery firm's candidate withdrew from the race.

Flynn is one of the board members the Swiss-Irish company's two-largest investors - Cobas Asset Management and Veraison Capital, which together hold about 20% of the shares - were calling to step down, along with current chairman Gary McGann, Dan Flinter and Rolf Watter.  

McGann has already agreed to relinquish his chairmanship role and that may now leave the door open for the candidate put forward by Cobas and Veraison – the former head of Aryzta's European division Urs Jordi – especially after the firm's own nominee Andreas Schmid withdrew yesterday

Aryzta said in a statement this morning management had wanted Flynn to stay on as a board member due to her position as chair of the audit committee "given the increased complexities of the financial year-end in light of the resignation of the CFO; the recent appointment of new auditors at the 2019 AGM; and the challenging financial circumstances arising as a consequence of Covid-19".

Finance chief Frederic Pflanz announced his resignation in August but will remain with the company until December after he "accepted a role in an unrelated business". 

"While the board continues to believe that audit committee continuity, in these circumstances, represents the best interests of Aryzta, Ms Flynn has accepted the expected decision of shareholders," the company added today.

Cobas and Veraison have for months been pressing for a shake-up of the company, namely a simplified business model and strategy, including the sale of additional assets to pay down debt. 

We could see some developments in that area at the EGM today, along with an indication of the outcome of a strategic review, which was launched earlier this year under CEO Kevin Toland.

Markets have speculated Aryzta could sell the business in its entirety, offload certain assets such as its foodservice operations, or exit any of its geographical regions. 

North America, its largest revenue generator outside of Europe, is the most likely target in that eventuality as Aryzta has been struggling for some time in that market.

However, Aryzta may choose to accept any of the potential offers emanating from a number of companies.

Last week, Zurich-listed Aryzta, said it was in "advanced discussions" with New York-based hedge fund Elliott Management to acquire the company. 

Interest has also reportedly been lodged but not confirmed by US-based bakery firms Flowers Foods and Hostess Brands, along with Japan's Yamazaki Baking and Mexican bakery business Grupo Bimbo. And also, back in July, Aryzta acknowledged it had received "unsolicited interest" from other undisclosed third parties. 

See just-food's analysis here: Is outright sale of Aryzta the ultimate solution to debt woes?